Exclusion Percentage

Exclusion Percentage

The exclusion percentage is used to compute the excludable amount of a pension under the general rule. This percentage is determined by dividing the taxpayer's total contribution by the expected return.

Since only 25 percent of the value was conveyed, the 40 percent exclusion percentage is reduced by 2 percent for each 1 percent that the easement is below 30 percent of the value of the entire property.

1202 gain must be reported as such on the taxpayer's return by reporting 100% of the gain and then excluding the appropriate exclusion percentage at the time of the gain (50% for stock acquired before February 18,2009, or after December 31, 2011; 60% for stock in certain empowerment zone businesses; 75% for qualified small business stock acquired after February 17, 2009, and before September 28, 2010; and 100% if the stock was acquired after September 27, 2010, and before January 1, 2012, and was held for more than five years).

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